Rail sale is a threat to spending, report says

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The Independent Online
INVESTMENT in railway infrastructure will fall dramatically, threatening the 30,000 jobs supplying the industry, unless the Government rethinks its privatisation policy, according to a report published yesterday, writes Christian Wolmar.

There will be little incentive to buy new rolling stock and the infrastructure is likely to deteriorate, the report, commissioned by Transport 2000, Eurotunnel and the Railway Industry Association, argues.

The report, Rail Privatisation: attractive investment or wishful thinking?, by the consultants Steer Davies Gleave, suggests that a 'planning and investment agency' should be created to avoid a hiatus in investment during the transition period before privatisation and to ensure a continued flow of funds after.

The authors claim that investment is already being affected by the uncertainties over privatisation and by the recession. Although spending on investment this year is at a record level, the figure is being skewed by spending on projects related to the Channel tunnel, while more mundane needs such as signalling are being ignored.

Under current plans, the first private sector franchises will become operational on the rail network by April 1994, but the authors say this was unlikely to bring about any immediate investment in new stock.